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Member
Posts: 49
Location: , United Kingdom | Hello,
Would it be possible/legal to exchange sterling into to NZ Dollars, and the exhange NZ Dollars to AU Dollars to try and get a better exchange rate. If so would I need 2 accounts one to transfer to NZ the ohter to AUS?
Thanks
Andrew | |
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Finance Expert
Posts: 12
| Andrew,
It is possible/legal to do this, but you would need a bank account for each destination country.
Also bear in mind if you were to do this you would be losing out twice on the exchange rate and you wouldn't be able to make a profit by simply buying one currency and then buying another straight away. If it was we'd all be millionaires!
Hope this helps,
Regards,
Richard.
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Member
Posts: 49
Location: , United Kingdom | Hello Richard
Thanks for the reply, but i'm still a bit confused. If I exchanged sterling into NZ at a rate of 2.5 then put it in a NZ account for a couple of months and transfered it to an Aus account at 0.97. Would I be right in saying £5,000 = NZ$12,500 = Au$12,125. Instead of £5,000 at 2.004 = Au$10,020.
Or have I got it completeley wrong?
Reason why I ask is on a recent trip to the Domincan Republic, we transfered stering into US$ then when we arrived we exchaged them into Caribbean$. This gave us a rate of 5 to 1 instead of 2 to 1 as the $ was worth more than £ over there.
Thanks
Andrew | |
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Finance Expert
Posts: 12
| Hi Andrew,
The current Market rate, or Inter Bank rate for £ - $NZD is about $2.7, so on £100k you would get $270,000. The rate on $NZD - $AUD is about 0.787, which means that NZ$270k would then buy you AUD$212,490. If you were to simply buy the Aussie Dollars from £ then the rate is 2.1265, giving you $212,650, $170 more. This is also an example based on the market rate, so you would need to factor in the margins on the company you use to do the transfer, making it a lot more cost effective to keep it to one transaction.
However, if you were to speculate and decide that you wanted to buy the New Zealand Dollar now hoping that it would decrease in value against the Aussie Dollar (thus giving you more AUD for your money), then that this is fine. Unfortunately HiFX would not be able to hep as this is speculating and something we cannot do for our clients, but if you have a NZ and OZ account there is no reason why this cant be done.
With regards to the Caribbean Dollar, the rate of exchange is actually pegged to the US Dollar, so if you exchange your money in the UK then you should get the same rate. From being there myself, some of the local exchange houses do value the US Dollar higher and you may get a better "tourist" rate exchanging US Dollars than £ Sterling, but this has nothing to do with the commercial and market prices.
I hope this helps,
Thanks,
Richard. | |
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Member
Posts: 49
Location: , United Kingdom | Hello Richard
Thanks for that. A lot clearer now
Andrew | |
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Exchanging dollars
